(Yicai Global) Jan. 25 -- Evergrande New Energy Vehicle Group’s shares surged more than 60 percent after the automaker said six Chinese business magnates will invest HKD26 billion (USD3.35 billion).

Evergrande NEV [HKG: 0708] roseas much as 67 percent in Hong Kong today before ending 52 percent higher at HKD45.35 (USD5.85). The stock has gained six-fold in the past 12 months.

Evergrande NEV will issue 952 million new shares to six investors, including China Gas Holdings Chairman Liu Minghui and the wife of Hong Kong billionaire Joseph Lau, the Guangzhou-based company said in a statement yesterday.

This latest investment in the electric vehicle arm of property developer China Evergrande Group comes after China’s NEV makers attracted a record level of investment last year in excess of CNY100 billion (USD15.4 billion), according to a report by corporate information site Qichacha.

Evergrande NEV raised HKD4 billion (USD516 million) through a private placement of shares last September. Buyers included internet behemoth Tencent Holdings, ride-sharing giant Didi Chuxing Technology and private equity firms Sequoia Capital and Yunfeng Capital.

China Evergrande first ventured into the auto business two year ago and aims to leapfrog Tesla to become the world's largest NEV player within three to five years, founder Xu Jiayin said in 2019. Its shares [HKG: 3333] closed 7.3 percent higher today at HKD16.83, after earlier advancing as much as 8.8 percent.

Near 10% Stake

Considering today’s stock price rally, the investment deal looks like a bargain. Each of the six invested HKD3 billion (USD387 million) or HKD5 billion (USD645 million) to collectively own almost 9.8 percent ofEvergrande NEV. The price agreed was HKD27.30 (USD3.50) per share, an 8 percent discount compared with the average closing price last week. Evergrande now has a 67.6 percent stake.

Evergrande NEV's finances are in the spotlight as its ambitious expansion plan has cost a lot of money. The company made a CNY3.3 billion (USD509 million) loss in 2019, almost doubling from a year earlier, according to its earnings report.

And the new market entrant has not yet sold a single car. Last November, it started trial output at plants in Shanghai and Guangzhou in preparation for mass production of the six Hengchi brand models it unveiled last August. The plan is to have 10 factories in China with each of them adding an output of 100,000 cars per year after their first phases.

Evergrande NEV is looking to go public in Shanghai. The firm hired Haitong Securities in September to handle the pre-listing tutoring procedure, the first step toward listing on the Nasdaq-style Star Market, according to the securities regulator. The tutorial stage normally takes about two months on other bourses.

Editor: Emmi Laine